Bad times, bad jobs? How recessions affect early career trajectories

Arbeitspapier

Workers who enter the labor market during recessions experience lasting earnings losses, but the role of non-pay amenities in either exacerbating or counteracting these losses remains unknown. Using population-scale data from Germany, we find that labor market entry during recessions generates a 6 percent reduction in earnings cumulated over the first 15 years of experience. Implementing a revealed-preference estimator of employer quality that aggregates information from the universe of worker moves across employers, we find that one-quarter of recession-induced earnings losses are compensated for by non-pay amenities. Purely pecuniary estimates can therefore overstate the welfare costs of labor market entry during recessions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers ; No. 22-12

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
• Subject: Earnings inequality ; recessions ; non-pay amenities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mahajan, Parag ; Patki, Dhiren ; Stüber, Heiko
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Boston
• (where): Boston, MA
• (when): 2022

Further information

• DOI: doi:10.29412/res.wp.2022.12
• Handle: http://hdl.handle.net/10419/273033
• Last update: 10.03.2025, 11:42 AM CET